Colorado Marijijuana Smuggling

[Darrell]

My bank recently upgraded their website for business banking and I could not get signed back in until I verbally confirmed via phone call that none of my business was hooch related. They actually asked me if I engaged in anything to do with the dope industry because they wanted no part of it.

That's the first I've heard of that particular bit on banking, though I'm not surprised. The licensed growers are still buying safes on a regular basis, last I heard, to stash all the cash, since they can't put it in the bank.

[HTRN]

This is obviously due to weeds continuing status of legal limbo.

[PawPaw]

This is obviously due to weeds continuing status of legal limbo.

From what I understand, legal weed is a no-no in the banking industry because it is still federally illegal. The way I heard the story, Eric Holder, et al, decided that legal weed is a bad thing. They were pissed at the states for enacting it, so they quietly told the banking industry that if their depositors were dealing in legal weed, the banks ran a risk of having their FDIC status jerked.

Ergo, all legal weed operations are cash businesses. They can't use the banking industry at all. No checking accounts, no credit cards, no line of credit. So, those businesses are sitting on huge amounts of cash.

I look on the legal weed business as just another data point in our huge national experiment on federalism and the over-reach of government.

[scipioafricanus]

This is obviously due to weeds continuing status of legal limbo.

From what I understand, legal weed is a no-no in the banking industry because it is still federally illegal. The way I heard the story, Eric Holder, et al, decided that legal weed is a bad thing. They were pissed at the states for enacting it, so they quietly told the banking industry that if their depositors were dealing in legal weed, the banks ran a risk of having their FDIC status jerked.

Ergo, all legal weed operations are cash businesses. They can't use the banking industry at all. No checking accounts, no credit cards, no line of credit. So, those businesses are sitting on huge amounts of cash.

I look on the legal weed business as just another data point in our huge national experiment on federalism and the over-reach of government.

Would that be a a continuation of "Operation Chokepoint" then?

[Langenator]

This is obviously due to weeds continuing status of legal limbo.

From what I understand, legal weed is a no-no in the banking industry because it is still federally illegal. The way I heard the story, Eric Holder, et al, decided that legal weed is a bad thing. They were pissed at the states for enacting it, so they quietly told the banking industry that if their depositors were dealing in legal weed, the banks ran a risk of having their FDIC status jerked.

Ergo, all legal weed operations are cash businesses. They can't use the banking industry at all. No checking accounts, no credit cards, no line of credit. So, those businesses are sitting on huge amounts of cash.

I look on the legal weed business as just another data point in our huge national experiment on federalism and the over-reach of government.

Would that be a a continuation of "Operation Chokepoint" then?

In this case, it actually is something that's against federal law, and not just something that the administration doesn't like, politically, but can't get at legislatively.

[Aesop]

Banks care little about threats of losing their FDIC status; the reality is that if they take weed deposits, both those assets, and the banks themselves, could be seized under the RICO statutes. The bank would be a de facto participant and beneficiary of the proceeds of narcobusiness. And the feds would get to keep everything while the courts took a few years to sort it all out afterwards. Putting money gained from "legal" pot sales into a bank would be about as asinine as asking the local beat cop to take care of your kilo of weed.

A federal raid on a bank that seized 5-10% of its total deposits in the form of cash on hand would cause most banks to fold, overnight and permanently.

And it would all be bulletproof in federal court.

[blackeagle603]

Just how many carwashes do you think Colorado can support?

I'm uncertain Mr. Heisenberg.

[Termite]

Banks care little about threats of losing their FDIC status; the reality is that if they take weed deposits, both those assets, and the banks themselves, could be seized under the RICO statutes. The bank would be a de facto participant and beneficiary of the proceeds of narcobusiness. And the feds would get to keep everything while the courts took a few years to sort it all out afterwards. Putting money gained from "legal" pot sales into a bank would be about as asinine as asking the local beat cop to take care of your kilo of weed.

A federal raid on a bank that seized 5-10% of its total deposits in the form of cash on hand would cause most banks to fold, overnight and permanently.

And it would all be bulletproof in federal court.

Don't have a federally chartered bank.

[Windy Wilson]

Hmmm. Something legal in some states and not others, with a federal law that conforms to some state's laws and not others.
I sense a conflict of laws among the states and the circuits. I wonder if the Dred Scott case might have some application here?